The purpose of this document is to explain the data and code to generate
The Lifecycle Effects of Corporate Takeover Defenses by
William Johnson, Jonathan Karpoff, and Sangho Yi.

Abstract

We document that the relation between firm value and the use of takeover defenses is 
positive for young firms but becomes negative as firms age. This value reversal pattern 
reflects specific changes in the costs and benefits of takeover defenses as firms age 
and arises because defenses are sticky and rarely removed. Firms can attenuate the value 
reversal by removing defenses, but do so only when the defenses become very costly and 
adjustment costs are low. The value reversal explains previous mixed evidence about 
takeover defenses and implies that firm age proxies for takeover defenses� heterogeneous 
impacts on firm value. 

This directory contains two data files (.dta files) and two do files (.do files) to be
utilized in Stata. 

Tables 1-4; 6-9
These tables and results can be generated by running the file Generate_Table_1-9.do. This
file should be placed in the directory c:\data along with the datafile 
Table_1-9_data.dta. The Stata code will then generate regression output for the tables in the
paper. Some of the results of summary statistics will need to be read from the Stata output.

Table 5.
Because the dataset to generate Table 5 contains the universe of 
CRSP/COMPUSTAT firms that meet the requirements of Faulkender and Wang (2006) we generate
this particular table using the file Generate Table_5.do. This file along with the data file 
Table_5_data_final_RFS.do should be placed in the c:\data directory to generate Table 5.
The executable will then create names Excel files with the regression output, although 
some of the summary statistics will need to be read in from the summary statistics in Stata.

For additional questions about the data or code, please contact: William C. Johnson:
wcjohnson@suffolk.edu

July 15, 2021

